Exhibit 10.17
PIK NOTE
October 29, 2003
FOR VALUE RECEIVED, the undersigned, EASY GARDENER PRODUCTS, LTD., a Texas
limited partnership (the "Borrower") hereby promises to pay to CAPITALSOURCE
FINANCE LLC, a Delaware limited liability company (the "Lender"), at the times
and in the manner set forth in the Loan Agreement (as defined below), accrued
and unpaid interest on the outstanding balance of the Term B Loan and any Term B
Interest Reserve Loans made by Lender to Borrower pursuant to the Loan Agreement
in the form of borrowings under this PIK Note, as set forth on the grid attached
hereto or on the books and records of Lender, such interest, when due, to be
treated as a principal sum equal to the PIK Interest due and payable at such
time and from time to time under and pursuant to the Term Loan and Security
Agreement, dated as of October 29, 2003, among Borrower, the other Credit
Parties, Lender (in its capacity as a Lender and as Agent), and other Lenders
party thereto from time to time (as amended, supplemented or otherwise modified
from time to time, the "Loan Agreement"), all at the times and in the manner set
forth in the Loan Agreement. Capitalized terms used but not defined herein shall
have the meanings given them in the Loan Agreement.
1. Interest and Payments. Xxxxxxxx promises to pay interest on the
outstanding principal amount of this PIK Note in cash pursuant to and as
required by the terms of the Loan Agreement. Payments of interest on this PIK
Note and other Obligations related hereto shall be paid only by wire transfer on
the date when due, without offset or counterclaim, in U.S. dollars in
immediately available funds as required in the Loan Agreement. Notwithstanding
any other provision of this PIK Note or any other Loan Document, any payments or
prepayments received under this PIK Note shall be credited and applied in such
manner and order as described in the Loan Agreement.
2. Principal Payments and Maturity. Unless earlier due and payable or
accelerated under the Loan Agreement, this PIK Note shall mature, and the
principal amount outstanding hereunder and other Obligations under and relating
to the PIK Interest, together with all other outstanding amounts due hereunder
and under the Loan Agreement, shall become due and payable in full on the
Maturity Date. Borrower shall have the right to pay the PIK Interest in full but
not in part, in cash, on the applicable payment date in accordance with the
provisions of the Loan Agreement.
3. Late Fee and Default Rate. Notwithstanding any other provision of this
PIK Note, the late fee, if any, and default rates set forth in the Loan
Agreement shall apply to this PIK Note.
4. Loan and Security Agreement. This PIK Note is referred to in, is made
pursuant to and subject to, and is entitled to the benefits of, the Loan
Agreement. The Loan Agreement, among other things, (i) provides for the creation
of PIK Interest evidenced hereby and the making of this PIK Note by Xxxxxx to
Borrower, (ii) contains provisions for acceleration of the maturity hereof upon
the happening of certain stated events upon the terms and conditions therein
specified, and (iii) contains provisions defining an Event of Default and the
rights and
remedies of the parties thereto. This PIK Note is a secured note, entitled to
the benefits of and security interests granted in, among other things, the Loan
Agreement and other Security Documents.
5. Prepayments. This PIK Note may be prepaid in whole or in part only as
permitted in the Loan Agreement and shall be prepaid in whole, in each case as
provided or required in the Loan Agreement. In accordance with the Loan
Agreement, no payment or prepayment of any amount shall entitle any Person to be
subrogated to the rights of Lender hereunder or under the Loan Documents unless
and until the Obligations (other than indemnity obligations under the Loan
Documents not then due and payable for any events of claims that would give rise
thereto that are not then pending) have been performed in full and indefeasibly
paid in full in cash and the Loan Agreement has been terminated.
6. Payments Due on a Day other than a Business Day. If any payment to be
made on or under this PIK Note is stated to be due or becomes due and payable on
a day other than a Business Day, the due date thereof shall be extended to, and
such payment shall be made on, the next succeeding Business Day, and such
extension of time in such case shall be included in the computation of payment
of any interest (at the interest rate then in effect during such extension)
and/or fees, as the case may be.
7. Waivers. Xxxxxxxx hereby agrees that the provisions of the Loan
Agreement relating to waivers and rights and remedies shall apply to this PIK
Note.
8. Lawful Limits. In no contingency or event whatsoever, whether by reason
of acceleration or otherwise, shall the interest and other charges paid or
agreed to be paid by Borrower for the use, forbearance or detention of money
hereunder exceed the maximum rate permissible under applicable law which a court
of competent jurisdiction shall, in a final determination, deem applicable
hereto. If, due to any circumstance whatsoever, fulfillment of any provision
hereof, at the time performance of such provision shall be due, shall exceed any
such limit, then, the obligation to be so fulfilled shall be reduced to such
lawful limit, and, any interest or any other charges of any kind received which
might be deemed to be interest under applicable law are in excess of the maximum
lawful rate, then such excess shall be applied in accordance with the Loan
Agreement.
9. Governing Law. This PIK Note shall be governed by and construed in
accordance with the internal laws of the State of Maryland without giving effect
to its choice of laws provisions.
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This PIK Note is executed as of the date first written above.
EASY GARDENER PRODUCTS, LTD.,
a Texas limited partnership
By: E G Product Management, L.L.C.,
its General Partner
By: /s/ Xxxxxxx Xxxxxx
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Name: Xxxxxxx Xxxxxx
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Title: Manager
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EASY GARDENER PRODUCTS, LTD.
PIK NOTE
Signature page
